Service Marketing: The Indy Event - Case Study Example

Introduction to service marketing The Indy event is a popular motor racing event which is held in Australia. This study aims at analyzing the sporting event from the Gronroos augmented service offering model. The study also analyzes the product strategy of the event and suggests improvements in order to make the event more attractive to the audience. The study also aims at understanding and developing a promotional strategy for the motor racing event. The study analyzes all the possible means of communication and marketing that the event organizers must undertake so as to make the event a worldwide sporting extravaganza. The study also highlights the benefits as well as shortcomings of some of the modes of integrated marketing communication. Introduction The Indy event is Queenslands premier sporting event which had an average attendance of about 297, 835 people. This event has generated over seven hundred jobs in several industries had has pumped more that fifty million US dollars into the Australian economy. The importance of the event can be gauged from the fact that the Queensland government injected over ten million US dollars towards the promotion of the event which it right describes as an amount spent well. The Indy event is a four day motor rally which is in the existence for about thirteen years. This event is also popular in the international markets and has over seven hundred acclaimed media persons from across the world who come from over 195 countries from across the globe. In 2002, the Indy event was placed in the Queensland Tourism Awards Hall of Fame for the third consecutive year. Sports industry is a huge industry and according to a study in US, the sports industry is the eleventh largest industry in the country. (Shannon, No Date) There are certain characteristics of services that makes a particular service brand unique and pragmatically difficult for managers to capture. The augmented services offering model helps in identifying brand differentiation sources. (Ozment, 1994) Gronroos augmented service offering model This model states that as a charecteristic of most of the services there are three basic components which forms the managerial way of constituting the process. The three components are stated below namely, Service accesibility Interaction with the service providor Participation of the consumer The Indy event must be organised in such a away that it is fully accesible to people form all over the world. As the event is held in Queensland Austrailia hence it is properly accesible to both the guests as well as the racists who participate in the event. The Indy event should have a direct interaction between the managers of the event and the guests so that there is no misinformation among the guests. The event managers must also ensure that the consumer participates in the event both passively and actively in the event. The event organisor must ensure that guests are fully satisfied and they promote the event (word of mouth communication) amongst their friends and relatives. (Gronroos, No date) Product strategy The services packaging model describes the product as a collection of tangibles, intangibles as well as a collection of different services which collectively form the total product. The service can be divided into two parts namely the core service which is the main service offering and the auxiliary service or the peripheral services which are the value added services which are of erred in addition to the main product. In case of the Indy event the entertainment provided by the motor racing event forms the core product and the facilities that are provided to a spectator constitute the auxiliary product. The event organizers must improve the core product as well as the auxiliary product as to offer maximum benefits to the customers. According to a concept managing the service offering requires four steps namely, 1. The service concept development 2. The basic service package development 3. Augmented product service offering. 4. Managing the product perception The service concepts helps in determining the intentions of a firm. In case of the Relevance 1. Originality ImpactIndy event the organisors aim at popularizing the event and providing a high level of satisfaction to the spectators. The basic service includes the service bundle which are offered by the service providers. This package is important as it determines the benefits that the customers revive from the service provider. Customer interaction plays a very important part of the basic service. The basic service package can be divided into three parts namely, 1. Core service 2. The facilitating services, 3. Supporting Services. The core service is the main service offering. In case of the Indy event the entertainment from motor car racing event forms the core service. The event must have some additional service for facilitating the uses of the core services. The services at the event like the seating arrangements form the facilitating services. The presence of internationally acclaimed racers in the event constitute the supporting services. These services serve as value addition components, or as a differentiation from its competitors. The event organizers must distinguish between the supporting and the facilitating services. The facilitating services are a must for every service offering. The absence of facilitating services renders the collapse of a service offering. The facilitating services must be designed so that they help in differentiating the service offering of the competitors. The basic package is not an equivalent of the perceived product The basic package corresponds to the technical outcome dimension of the perceived quality of the service offering.. The elements of the basic package determine the service that the customer actually receives from the service provider. They do not reveal the perception of the service offering or the customer feedback. The elements of the basic service package should be integrated into the service product or else, the product concept will not match the customers perception of the service offering. The core service offering is that service which is designed to understand a primary demand for a described target market. (Forrest, ET al, 1995) The Indy event targets people with a high disposable income, hence the event organisors should provide the spectators of the event should ensure that the best motor racers from all over the world participate in the event. This would draw a huge crowd as the basic service that the customers expect from the organizers are a good racing event. Moreover by attracting the best racers the event would get more international accreditation and hence would draw more sponsors for the event. The customers would also feel that they are being offered the best possible entertainment which would result in making up a good brand image for the event. International racers participating in the event would also draw spectators from across the world, which would make this an international event. The augmented or the value added services are the services that are offered in addition to the basic product. A good service package does not assure that the service offering is acceptable for the customers. The quality model of services models state that the service production as well as the delivery process and more importantly the buyer seller interactions forms an integral part of the service offering. Image of an event is a key concept in todays marketing programs, sports and tourism are the areas which have assumed vital importance with regards to the positioning of an event. (Michael, 1998) The event organisors can introduce certain value added services like a sight seen tour for the international guests as a part of the service offering apart from the four day motor racing event. The organisers can also make a full package for the event which would include pick ups and drops for the spectators and a full package which would include the travel and accommodation arrangements. The event organisors can tie up with premier travel agencies for making this package. The event organisors can set up customer contact points at various places around the world. This would open up a direct interaction point with the customers. It can also enter into tie ups with premier travel agencies to facilitate excellent customer client interaction. In order to popularize the event the event organizers can invite celebrities for activities like inauguration of the event. This would result in the event drawing attention from around the world. Sports events are an important as they are a significant part of modernity and hence should have transparency in operations. This would have a huge impact on the customer satisfaction. (Horne, Manzenreiter, No date). Product or service quality perception has a filtering effect on the brand image of a service offering. A fir must manage its local or corporate image and its market communication strategies so that a positive framework is created in the minds of the customer. The event organisors must enter into tie ups with the premier tourism bodies in Australia so that the event is properly communicate to the people around the world. It should rope in good advertising agencies to create an efficient marketing communication channel. It can also enter into tie ups with the corp-orates as a part of the promotional mix of the service offering. (Marketing Association of Australia and New Zealand, No Date) Promotional Mix The promotional mix for an event must fulfill the three requirements namely, 2. Relevance 3. Originality 4. Impact The main aim of marketing communication is to have a platform wherein the customers directly interact with the service provider. A communication wheel consists of several marketing communication tools like Advertising, Public relations, personal sales, direct marketing and interned based marketing. A good advertisement should create attention, stimulate or create a desire, finally bring an action. This is known as the AIDA model (Attention, Interest, Desire, Action). In addition to this a marketing communication should prompt trial, adds the brand to the repertoire of the customer, works towards changing the attitudes of the people, finally customer relationship establishment. Integrated marketing communications are usually adopted by companies for creating synergies, to have a competitive advantage and to have greater impacts over the customers. The organizers of the Indy event can take the following modes of communication which are as follows. Advertising Advertising is defined as any form of paid non personal communication regarding an event product etc.. The modes of advertising can be print media, TV, internet etc.. TV Television is a very powerful mode of communication. The organizers of the Indy event should target television channels like sports and news channels as the target audience would most likely be viewing these channels. Print media The organisers can enter into tie ups with media houses. A tie up with the media houses would lead to these media houses making articles which would give an idea of the event. Moreover, an increased media attention of the event would popularize the event and bring about the attention of the people. Internet marketing Internet marketing is one of the most powerful channels of communication. The channel of communication assumes significance in the sense that the target audience of this event is highly internet savvy as it targets the premium customer segments. The organisors of the event can also take up the multimedia advertising strategies using the internet as a communication platform. It can also develop its own website which should be attractive and informative. It can also place banner ads on related sites. It should design its site so that the site has a good page ranking in search engines. It can also design games on its web page as well as videos on the site so as to make the site informative and at the same time appealing to the customers. Sponsorship Sponsorship can be defined as the material or financial support for any event or a product by non related organizations or donors in exchange for a prominent exposure of the sponsors brand. Sponsorship involves the activities of an exchange between the sponsor and the event as well as marketing of association. Sponsorship is a form of marketing communication that provides an excellent medium of marketing communication. Sponsorship increases the market reach of any event. The event organisors at the Indy event should enter into sponsorship agreements with companies which would increase its market reach while targeting the right audience. Public Relations Public relations are defined as the management function which evaluates public attitudes as well as identifies the procedures and the public policy of an individual or an organization. Publicity on the other hand is defined as the non-personal communication about a product, service or an organization which is not paid directly. Media coverage plays a very important role in public relations as it has a wide reach among the masses. Word of mouth Marketing This is a form of advertising in which the companies relies on the promotion of an event by the customers. This form of marketing communication is very important as it comes free of cost and the organisors do not have to incur any cost for this mode of marketing communication. The event managers of the Indy event must provide an excellent service offering to the guests so that they promote the event amongst their friends and relatives. The company must also ensure that the guests are fully satisfied as an unsatisfied guest may also lead to a negative promotion of the event. Social Marketing Social networking has nowadays developed into a major mode of marketing communication. Popular social networking sites like face book and Orkut are a popular medium for this kind of marketing. The Indy event managers must augmented the service offering modelput by putting up effective ads as well as post communities on these social networking sites so as to have an increased web presence. The social marketing mode of communication has a wide reach amongst the people and care should be also taken so that a negative propagation about the event does not happen in the future. Viral Marketing Viral marketing involves creating informative and entertaining messages which are designed for passing in an exponential fashion. Popular sites like you tube are a popular mode of communication for viral marketing. The event organisors can put up video links on sites such as you tube which are highly popular amongst the events target audience. This would go a long way towards promoting the event at very affordable prices. The event managers must also take care that a negative communication is not developed as internet is an open forum hence it should ensure that the guests have a high level of customer satisfaction so that there is no misinformation about the event. Ambient advertising This mode of marketing communication involves surrounding the market with a large number of advertising materials like cabs, receipts etc. This mode of communication requires a large gathering of people. Posters and ads of the event can be put up on cabs, buses and shopping malls which have a high footfall. Conclusion The Indy event is an event which has a huge potential. The event organisors must ensure that the service offering is amongst the best in its category. The event organisors must also ensure that there is proper communication about the event. The organisors must ensure that the service offering satisfies the guests, it should draw good motor racists from across the globe so that guests are directed towards the events. They should undertake product/ service bundling to offer a huge array of services to the customers. Finally, the event managers must undertake an effective promotional campaigning to make the event a worldwide success story. References Sanghera, J., de Chernatony, L. and Brown, A. 2002. Testing Gronroos Model in the Financial Services Sector. [Online] Available at http://oro.open.ac.uk/1638/ . [Acessed on 21 September, 2009]. Marketing Associaton of Austrailia and New Zealand. No Date. Managing the Service Product. [Online]. Available at www.marketing.org.au/images/cimages/servmark.pdf. [Acessed on 21 September, 2009]. Forrest et al, 1995. Services Marketing Strategic Planning Models. Middle Tennessee State University. 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